Azerbaijan’s state oil company, SOCAR, is set to acquire a 10% stake in Israel’s Tamar natural gas field from Israeli businessman Aaron Frenkel. While the financial details of the deal have not been disclosed, the acquisition is a significant step in SOCAR’s strategy to expand its presence in global energy markets. SOCAR is purchasing the stake from Union Energy, a company controlled by Frenkel. In 2022, Frenkel acquired an 11% stake in the Tamar field from Abu Dhabi’s Mubadala Petroleum for approximately $520 million.

The Tamar gas field, discovered in 2009, began production in 2013 and has played a critical role in Israel’s energy sector. Located about 90 kilometers west of Haifa in the Mediterranean Sea, Tamar is Israel’s second-largest natural gas reservoir, with an estimated 10 trillion cubic feet (tcf) of reserves. The field’s output has helped Israel transition toward energy independence and establish itself as a regional gas exporter. Since 2017, Israel has been exporting natural gas from Tamar to Jordan, further solidifying its role in the regional energy market.

SOCAR stated that this acquisition is part of a broader plan to invest in strategic energy assets worldwide and expand its production footprint. “The agreement was signed subject to certain conditions being met, including customary regulatory and other approvals,” the company noted. The move aligns with SOCAR’s long-term objective of securing valuable energy resources and diversifying its portfolio beyond Azerbaijan’s borders.

Tamar is operated by US energy giant Chevron, which holds a 25% stake in the field. Other stakeholders include Isramco, Tamar Investment 2, Tamar Petroleum, and Dor Gas. The field’s production is crucial for both domestic consumption in Israel and exports to neighboring countries, making it a valuable asset in the region’s energy landscape.

This deal marks SOCAR’s latest attempt to enter Israel’s natural gas sector. In 2023, the company joined forces with British energy major BP and NewMed Energy to bid for offshore gas exploration licenses near Israel’s Leviathan field, one of the world’s largest deep-water gas discoveries. That bid reflected SOCAR’s growing interest in the Eastern Mediterranean’s energy potential and its commitment to securing a foothold in the region.

Azerbaijan’s relationship with Israel carries strategic significance, particularly given its geographic position bordering Iran. The ties between the two countries have strengthened in recent years, partly due to Israeli support for Azerbaijan in its conflict with Armenia. Israel is among Azerbaijan’s leading arms suppliers, while Azerbaijan plays a crucial role in Israel’s energy security by providing oil.

SOCAR’s latest investment in Tamar highlights Azerbaijan’s ambitions to expand its global energy presence while deepening economic ties with Israel. As the energy landscape continues to evolve, this deal underscores the growing importance of regional partnerships in securing long-term energy security and economic stability.